NBC – Securities regulators are investigating Charles Schwab and Merrill Lynch over whether they are doing enough to police their clients’ identities, sources said, a sign a crackdown on money-laundering is expanding, two sources told Reuters on Wednesday.
Specifically, the regulators are looking into whether the brokerages missed red flags that could indicate attempts to move money illicitly or to feed proceeds from illegal activities into the financial system, the sources said.
The Securities and Exchange Commission is probing Charles Schwab and Merrill Lynch for violations of anti-money laundering rules that require the brokerages to know their customers, the sources said.
Schwab is conducting an internal investigation, one of the sources said. A spokesman for the SEC declined to comment. Representatives of Schwab and Merrill did not immediately respond to requests for comment.
It was not clear what penalties the SEC would seek or whether it planned to also charge individuals or any other financial institutions for any violations. The investigation is not yet complete and the timing of any cases against the companies could not be learned.
